At the recent Northeast Association of Rail Shippers (NEARS) fall conference, Surface Transportation Board (STB) Commissioner Robert Primus delivered a stark assessment of the rail industry's persistent service issues that have plagued the sector for decades.
Speaking to railroad carriers and shippers in Portland, Maine, Primus identified service quality as the industry's most pressing challenge. "These problems predate my tenure at STB by many years," he noted. "They severely constrain network expansion, make it difficult to attract new customers, and damage railroads' reputation compared to their primary competitor—trucking."
Trucking's Competitive Edge: Reliability and On-Time Performance
Commissioner Primus emphasized that trucking has consistently outperformed rail in three critical areas: reliability, customer service, and on-time delivery. "If railroads hope to meet current challenges and better serve future supply chain needs," he argued, "they must address these gaps head-on."
"In my conversations with both rail companies and shippers, I sense deep frustration," Primus continued. "These service limitations reduce our national rail network's efficiency and effectiveness. I strongly believe we must tackle these core issues—in my view, rail service has been sacrificed to operating ratios, profits, stock buybacks, and dividend payments."
He observed that while Class I railroads enjoy strong financial health, their service problems continue to worsen. "I'm eager to see service improvements and look forward to collaborating with railroads and shippers to develop solutions that prevent these recurring issues from repeatedly coming before the Board."
Precision Scheduled Railroading: A Double-Edged Sword
Primus identified Precision Scheduled Railroading (PSR) as one contributor to rail service problems. The operational model, pioneered by late railroad legend E. Hunter Harrison during his tenure at CSX before his December 2017 passing, requires freight to be ready when railcars arrive for loading—or risk being left behind.
While PSR delivered positive results under Harrison's leadership at both CP and CN—including lower operating ratios, service improvements, record network reinvestment, and substantial shareholder value—Primus suggested its implementation has created challenges.
"Conceptually, PSR should improve service," Primus acknowledged. "But we've encountered implementation difficulties that disproportionately affect shippers. Rail customers shouldn't bear this burden. We must work collectively to resolve these issues and deliver better service."
Beyond PSR: Workforce Reductions and Investment Questions
The commissioner highlighted additional challenges including workforce reductions—Class I railroads have cut staff by 20% over five years—and questions about whether network investments are sufficient and forward-looking.
"We need honest assessments of service data and clarity about the industry's direction," Primus said. "Many challenges remain, but I'm excited by this opportunity to address longstanding issues and help improve our rail network."
Data-Driven Solutions for Rail Service Improvement
A comprehensive approach to rail service improvement requires establishing key performance metrics across several dimensions:
Service Quality Metrics: Developing quantifiable measures including on-time delivery rates, average transit times, cargo damage rates, customer complaint frequency, and train speeds across different routes.
PSR Impact Analysis: Evaluating how Precision Scheduled Railroading affects various stakeholders—railroad financials, shipper service quality, and employee conditions—to identify needed adjustments to the operational model.
Workforce Strategy: Analyzing the causes and consequences of rail industry job cuts while developing retention and recruitment solutions through compensation improvements, better working conditions, training programs, and automation.
Investment Evaluation: Creating frameworks to assess whether capital expenditures align with strategic priorities (capacity, safety, efficiency) while properly accounting for implementation risks.
The Path Forward for Rail Service
Commissioner Primus's remarks underscore the urgent need for rail service improvements. As supply chain demands grow and trucking competition intensifies, railroads must prioritize operational reliability and customer satisfaction through data-informed strategies that balance efficiency with service quality.